9.             SUBSEQUENT EVENTS:

On October 5, 2017, we filed our report on Form 8-K, as amended by our filing made on October 17, 2017 (the “Form 8-K”), to disclose that we entered into an Asset Purchase Agreement on October 2, 2017 with Promet Therapeutics LLC, (“Promet”) and its wholly owned subsidiary, Processa Therapeutics LLC, (“Processa”). We closed on this agreement effective October 4, 2017. Under this agreement, we acquired all of the assets of Promet, in exchange for approximately 222,217,000 shares of the common stock of the Company, which, at the closing, constituted approximately 90% of our issued and outstanding common stock on a fully diluted basis. Also under this agreement John McGrain, our former Chief Executive Officer and Director agreed to indemnify and hold the Company harmless (the McGrain Indemnification) from all liabilities and claims exceeding $25,000 that arose out of the operations of Heatwurx through October 4, 2017.  The amount of the McGrain Indemnification (i) shall not exceed $500,000 in the aggregate, and (ii) will lapse and be no longer effective on the earlier of (a) 180 days following October 4, 2017 or (b) the completion of an underwritten public offering of the securities of the Company.  At the closing, Promet assigned to the Company all of the assets and operations of Promet that will going forward constitute our sole operating business (the Asset Purchase). In furtherance of the transaction requirements agreed upon by the parties, we also converted prior to September 30, 2017 approximately $2.5 million of unpaid debt evidenced by promissory notes in exchange for about 12.954 million shares of common stock and converted 178,924 shares of Series D Preferred Stock into 719,500 shares of common stock. Immediately following the closing on October 4, 2017 there were approximately 246,908,000 shares of common stock issued and outstanding of which the prior Heatwurx Inc. shareholders owned approximately, 24,691,000 shares after giving effect to shares issuances made for Series D Preferred stock and existing debt converted into common stock.

Following close of the Asset Purchase, as of October 4, 2017, John McGrain, our Chief Executive Officer and Director, submitted his resignation as a director and from all other offices of our Company, and Christopher Bragg, our director submitted his resignation as a director and from all other offices of our Company. Effective October 4, 2017 David Young, Patrick Lin and Virgil Thompson were appointed to our Board of Directors and David Young was appointed our Chief Executive Officer and Acting Chief Financial Officer. Justin Yorke continues to serve as director.

As of October 4, 2017 certain entities affiliated with John P. McGrain and Justin Yorke had purchased $1.25 million of our senior convertible notes (“Senior Notes”) in a bridge financing undertaken by us to support the Processa operations. Principal and interest under each Senior Note is due on earlier of (i) the next Private Investment in Public Equity (“PIPE”) financing we undertake, provided that financing yields gross proceeds of at least $4 million (in which event the Senior Notes will automatically convert into securities issued in that financing) or (ii) the one-year anniversary of that Senior Note. The Senior Notes bear interest at 8% per year, and are payable in kind (common stock), computed on a market valuation of $72 million. Holders of Senior Notes (a) may elect to receive 110% of principal plus accrued interest in the event there is a change of control prior to conversion of the Senior Notes, (b) are entitled to full ratchet anti-dilution protection in event of any sale of securities at a net consideration per share that is less than the applicable conversion price per share to the holder, (c) are entitled to certain registration rights for the securities underlying the Senior Notes and (d) have been granted certain preemptive rights pro rata to their respective interests  through December 31, 2018.

Effective October 23, 2017 we changed our name to Processa Pharmaceuticals, Inc. and authorized a one for seven combination, or reverse split, of our shares. We have applied to the Financial Industry Regulatory Authority for implementation of the reverse split in trading markets and are awaiting approval of that request.   As the reverse split has not yet been approved, these financial statements do not reflect any adjustments with respect to this event.